Madoff’s Accountant to Plead Guilty – $534m Paid out to His Victims So Far

October 30, 2009

(ChattahBox) — Bernard Madoff’s longtime accountant and auditor is expected to plead guilty to fraud charges next week, in a deal with federal prosecutors.  Friehling was originally arrested in March.  He is accused of falsely certifying Madoff’s books and has been charged with seven counts, including securities fraud and false filing with the Securities and Exchange Commission.  Friehling’s “deception helped foster the illusion that Mr. Madoff legitimately invested his client’s money,” according to prosecutors. The more serious counts carriy a maximum sentence of 20 years and fines of up to $5 million, so Friehling, 49, could face up over a 100 years in prison, though substantial cooperation with prosecutors can result in leniency.  Still it should leave him plenty of time to cool his heals with Madoff, who is serving a 150-year sentence at a prison in North Carolina.

So far more than $534 million has been paid to 1,368 victims of Bernard Madoff through the national fund Securities Investor Protection Corp. that insures against failed brokerage firms, according to Irving Picard, the trustee appointed to recover assets for investors with the convicted swindler. Picard said (via the Boston Globe) he has so far identified allowable claims totaling $4.43 billion and is still processing thousands of claims filed by alleged victims, in a call with reporters yesterday. To date, he has identified 2,335 investment accounts with net losses of $21.2 billion with Madoff.   Picard said he has only recovered about 5% of those losses or $1.4 billion so far and expects to file more lawsuits to force the return of money some investors unknowingly made at the expense of others.  Picard said his staff has found 2,568 investors who withdrew more money from Madoff accounts than they originally invested. Those investors are vulnerable to what is called clawback lawsuits that demand they return some of the money they made.


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